A week ago, Corona beer maker Constellation Brands (STZ) upped its stake in the world’s largest medical marijuana company Canopy Growth (NYSE: CGC) by acquiring 104.5 million shares of the Canada-based company for C$48.6 per share. The winemaker had already invested $191 million in Canopy last October. In the last one week, Canopy has skyrocketed over 50% and on Tuesday the stock grew 3.01% to $38.67.
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Trading in cannabis stocks was higher on Tuesday as these companies announced supply agreements with retail operators ahead of the launch of the cannabis recreational market in October 2018. Canadian-based pot company Cronos Group (Nasdaq: CRON) that got listed on Nasdaq in February this year, announced its initial supply agreements for retail distribution across Canada. Shares of Cronos Group jumped 13.25% to $8.29 in Nasdaq when the market closed yesterday.
Another Canadian marijuana company Tilray (Nasdaq: TLRY), which was listed in the US in July, surged 11.25% to $39.94 at the end of Tuesday’s trading session. This was helped by the Ontario Cannabis Store’s announcement of supply agreements with 26 authorized cannabis manufacturers, including Tilray.
A report released by Arcview Market Research/BDS Analytics in June 2018 states that the US legal cannabis market is estimated to reach $11 billion in consumer spending in 2018 and $23.4 billion in 2022. The report adds that the global spending is expected to hit $32 billion by 2022. Also, the roll-out of international legalization is touted to reduce the US share from 90% in 2017 to 73% in 2022.
In its February 2018 report, Arcview Market Research/BDS Analytics stated that the global spending on legal cannabis is estimated to reach $57 billion by 2027 with North America accounting for $47.3 billion. However, headwinds like volatility in the marijuana industry and inconsistent regulations might curtail the expansion opportunities for marijuana producers.